WE WORK INDIA MANAGEMENT LIMITED AND ANRversusKGA INVESTMENT AND ANR

            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                    CIVIL APPELLATE JURISDICTION

                      WRIT PETITION NO.10641 OF 2026


WeWork India Management Ltd.            ....   Petitioners
(Formerly known as WeWork India
Management Pvt. Ltd.), Mumbai,
& Anr.
          Vs.

M/s KGA Investments & Anr.              ....   Respondents


Mr. J.P. Sen, Senior Advocate a/w Ms. Neha Naik and Ms. Sanaea Lakar i/by
Phoenix Legal for Petitioners.

Mr. Prateek Sekseria, Senior Advocate a/w Ms. A.S. Pal, Janmesh Vora i/b
Mehta & Padamsey for Respondent No.1.

                                  CORAM : ARUN R. PEDNEKER, J.
                                  DATE   : 18th August 2026

P.C. :


1.       By the present Writ Petition, the Petitioners challenge the Order dated

27th April 2026 passed by the learned Appellate Bench of the Small Causes

Court, Mumbai (Bandra Branch), in Revision Application No.78 of 2025,

whereby the learned Appellate Bench partly allowed the Application,

Exhibit-58, seeking a direction to deposit the license fee in respect of

Licensed Area-2, and thereby set aside the Order passed by the learned


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Small Causes Court, Bandra, Mumbai. The said Application, Exhibit-58, was

partly allowed in terms of prayer clause (a) thereof, which is reproduced

hereunder:

       “(a) pending the hearing and final disposal of the suit, the
       Defendant No.1 be ordered and directed to pay the arrears of
       license fees and other charges in respect of Licensed Area-2
       from March 2022 being a sum of Rs. 7,14,79,017/- (Rupees
       Seven crores fourteen lakhs seventy nine thousand and
       seventeen only) being the license fees for Licensed Area- 2
       from March 2022 till July 2024 and as per Exhibit AC
       annexed to the Plaint;”

It is further directed that Defendant No.1 to deposit the amount claimed in

prayer clause (a) within a period of three months from the date of the order,

i.e., 27th April 2026.

2.     The facts giving rise to the Writ Petition, in brief are :

       The Respondent No.1 entered into a Leave and License Agreement,

under which two areas of the building were defined: (i) Licensed Area-1,

comprising the ground floor to the 8th floor; and (ii) Licensed Area-2,

comprising the 9th floor and terrace.

       The license in respect of Licensed Area-1 commenced on 7th April

2019, whereas the license in respect of Licensed Area-2 was to commence

upon receipt of the Full Occupancy Certificate of 9th floor and terrace.



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       In respect of Licensed Area-1, the agreed security deposit equivalent

to 2½ months’ license fee was deposited, amounting to Rs. 7,00,47,075/-.

However, in respect of Licensed Area-2, although a security deposit of Rs.

48,47,587.50/- was required to be deposited, the Respondent No.1 failed and

neglected to deposit the said amount after the Licensed Area-2 became

available for occupation.

       There are disputes inter se between the parties. It is stated that the

Petitioners only used the ground floor up to the 6 th floor and, when the 9th

floor and terrace were offered, they did not pay the security deposit or the

rentals. As regards Licensed Area-1, disputes are pending before the Courts

also. As regards Licensed Area-2, independent proceedings have been

initiated and are pending consideration. The present proceedings arise in

respect of Licensed Area-2.

3.     The learned Counsel for the Petitioners relied upon various clauses of

the agreement and submitted that the security deposit of approximately

₹7.00 Crores paid in respect of Licensed Area-1 ought to have been adjusted

towards the rentals payable for Licensed Area-2. The said submission was

accepted by the learned Trial Court. However, the learned Appellate Court

reversed the judgment of the learned Trial Court, giving rise to the filing of

the present Petition.

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4.     Learned counsel submits that, Clause No. 6, relating to the security

deposit is relevant to the present dispute. It is submitted that Rs. 7.00 crores

has been deposited towards security deposit for Licensed Area-1 and that,

within 7 days of intimation in accordance with Clause 3.8, the Petitioner was

required to deposit Rs.48.00 lakhs towards security deposit of Licensed

Area-2, and the same is to constitute part of the security deposit. The

Licensor shall, in terms of Clause 6.3, upon expiry or earlier termination of

the Agreement, subject to deductions towards Licence Fees, electricity

charges, utilities and any other charges, taxes, amounts, if any, together with

interest thereon, if any, or any other amounts due and payable by the

Licensee hereunder, refund the security deposit upon delivery by the

Licensee of vacant charge of the premises to the Licensor in the manner

provided.

5.     Learned counsel submitted that the entire premises comprising

Licensed Area-1 and Licensed Area-2, undisputedly, have been surrendered.

It was further submitted that a sum of approximately ₹7.00 crores,

pertaining to Licensed Area-1, is lying with the landlord by way of security

deposit and, in terms of Clause 6.3 of the agreement, the said amount ought

to have been adjusted towards the license fees payable in respect of Licensed

Area-2. It was, therefore, contended that the Revisional Court committed a

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jurisdictional error in reversing the judgment of the Trial Court.

6.     Per contra, learned counsel for the Respondents submits that, in terms

of Clause 6.1, the security deposit is available for Licensed Area-1 and that

there are substantial outstanding amounts of more than Rs. 30.00 crores qua

Licensed Area-2. He has also given a chart indicating that the total

outstanding amount is Rs. 58,70,59,000/- towards Licensed Area-1. It is

submitted that the litigation is pending in respect of Licensed Area-1 and

that the security deposit has to be adjusted against the dues relating to

Licensed Area-1. It is also submitted that Clause 6.1 clearly indicates that

the security deposit is equivalent to up to 2.5 months’ license fees for

Licensed Area-1.

7.     Relevant clauses i.e. 1.1(k), 1.1(p), 1.1(q), 1.1(r), 1.1(t), 3.1, 3.8, 5.3

and 5.4 of the Licensed Agreement dated 17 th May 2019 (read with the

Rectification Deed dated 30th September 2019), are reproduced below :

       Clause 1.1 (k) :

       “Full Occupancy Certificate means the occupancy certificate to
       be issued by the Government Authority with respect of
       Licensed Area 2”

       Clause 1.1(p)

       "Licensed Area 1 " shall mean the area comprised of ground to
       the 8th floor of the Building admeasuring 2,66,846 (Two Lakh
       Sixty-six Thousand Eight Hundred And Forty-six) square feet
       of Gross Licensable Area, more fully described in Schedule B:"
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       Clause 1.1(q)

       "Licensed Area 2” shall mean area comprised of 9th floor of the
       Building along with the terrace of the Building admeasuring
       18,467 (Eighteen Thousand Four Hundred and Sixty Seven)
       square feet of Gross Licensable Area, more fully described in
       Schedule B."

       Clause 1.1(r)
       "License Commencement Date shall mean April 7, 2019"

       Clause 1.1(t)

       “License Fee Commencement Date shall mean February 7,
       2020”

       Clause 3.1

       “Subject to the terms and conditions stated herein, the Licensor
       shall deliver charge of the Licensed Area to the Licensee on the
       License Commencement Date, with the specifications as listed
       out in Appendix A-1 completed”

       Clause 3.8

       “The Licensor has informed the Licensee that the Licensor
       shall endeavor to obtain, at its sole cost, the Full Occupation
       Certificate in respect of Licensed Area 2. The Licensor shall
       intimate the Licensee immediately on receipt of the Full
       Occupancy Certificate (and send a copy of the same to the
       Licensee). On and from the Execution Dare, and no person
       (other than the Licensee) shall be permitted to access the
       Licensed Area 2 without the Licensee's prior written
       permission, provided that the Licensee shall not be entitled to
       user the Licensed Area 2 until the Full Occupancy Certificate is
       obtained. The Licensor's ...illegible.. to the Licensed Area 2
       shall be subject to the terms of this Agreement.”



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       Clause 5.3

       “With respect to the Licensed Area 1, the Licensee shall
       commence payment of the License Fee from the License Fee
       Commencement Date as per the details set out in Annexure 3”

       Clause 5.4

       "With respect to the Licensed Area 2 and subject to Clause 5.2
       above, the Licensee shall commence payment of the License
       Fee from the date of intimation by the Licensor upon receipt of
       Full Occupancy Certificate.”


8.     Clause 6.1, 6.2 and 6.3 are reproduced hereunder :

       “Clause 6.1

       "Simultaneous with the execution of this Agreement, the
       Licensee has paid to the Licensor a sum of Rs.7,00,47,075
       (Rupees Seven Crores Forty-Seven Thousand and Seventy
       Five only), equivalent to 2.5 months' License Fees as and by
       way of an interest-free refundable security deposit in respect
       of the Licensed Area 1 ("Security Deposit 1"), the receipt
       whereof is hereby acknowledged by the Licensor. The
       Security Deposit 1 has been paid in the following manner.

            (a)     Rs. 1,40,09,415/- (Rupees One Crore Forty
            Lakh None Thousand Four Hundred and Fifteen
            only) has been paid on March 6, 2019 against the
            execution of a Heads of Terms dated February 18,
            2019;

            (b)     The balance amount of Rs.5,60,37,660/-
            (Rupees Five Crore Sixty Lakh Thirty Seven
            Thousand Six Hundred and Sixty only) has been
            paid prior to/ simultaneous with the execution of this
            Agreement."
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       Clause 6.2

       "Within 7 (seven) days of intimation in accordance with
       Clause 3.8 above, the Licensee shall pay to the Licensor, a
       sum of Rs,48,47,587.50 (Rupees Forty Eight Lakhs Forty
       Seven Thousand Five Hundred and Eighty Seven and Fifty
       Paise only) as and by way of an interest free security deposit
       in respect of the Licensed Area 2 ("Security Deposit 2"). The
       aggregate of Security Deposit 1 and Security Deposit 2 shall
       constitute the security deposit (“Security Deposit")."

       Clause 6.3

       "The Licensor shall, upon expiry or earlier termination of this
       Agreement, subject to deduction towards License Fees.
       electricity charges, utility and any other charges, taxes,
       amounts, if any (together with interest thereon, if any) or any
       other amounts due and payable by the Licensee hereunder,
       refund the Security Deposit upon delivery by the Licensee of
       vacant charge of the Premises to the Licensor in the manner
       set out hereunder.”
                                                 (emphasis supplied)

9.     Considering the submissions and having perused Clauses 6.1, 6.2 and

6.3, I find that the adjustment of the security deposit pertaining to Licensed

Area-1 cannot be made towards the license fees payable for Licensed Area-

2. There are substantial outstanding demands in respect of Licensed Area-1,

and the landlord is holding a security deposit of Rs. 7.00 crores towards

Licensed Area-1. Permitting adjustment of security deposit of Licensed

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                      Area-1 towards the rental of Licensed Area-2 would deprive the landlord of

                      the security available against the outstanding liabilities relating to Licensed

                      Area-1.

                      10.    Thus, I find no error in the reasoning given by the learned Appellate

                      Court that the license fees and the security deposit towards Licensed Area-1

                      cannot be adjusted towards the license fees for Licensed Area-2. The writ

                      petition is accordingly dismissed.


BHALCHANDRA
GOPAL DUSANE
                                                                       [ ARUN R. PEDNEKER, J. ]
Digitally signed by
BHALCHANDRA
GOPAL DUSANE
Date: 2026.08.25
18:59:32 +0530




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